The news about Grand American Hotel paying $1.95 million to settle ICE fines because some of its managers created employment agencies to rehire unauthorized workers is a reminder to employers that you can’t do indirectly what you cant do directly. Apparently, a previous ICE audit resulted in the termination of numerous unauthorized workers from the hotel, but some hotel managers thought they could beat the system by hiring these same workers through some type of leasing agency. It didn’t work.

The issue isn’t uncommon. During an ICE audit, an employer may receive a notice stating certain employees are not authorized to work. Sometimes the employer may have a properly completed I-9, but the employee has provided fraudulent or suspect documents. These employees may be terminated as a result. When an employer loses a large percentage of its workforce, it often looks for ways to keep the business running as it had before.

Ive been asked, Can we have these terminated employees go work for a temp agency and come back to work for us? The answer is, Absolutely not! The employer already has actual knowledge that these individuals are unauthorized.

The Grand America Hotel news also is a reminder to employers that the immigration-related compliance of its contingent workforce (e.g., independent contractors) in general is important. Employers should no longer feel any comfort with the fact that the contingent workers are not technically W-2 employees, especially if there are indications (e.g., constructive knowledge) that such individuals are unauthorized.

What should employers do?

Have concrete contractual provisions with its independent contractors and leasing agencies relating to immigration compliance; and

Consider auditing its contractors to ensure they are doing what they are legally required to do to ensure their employees are authorized to work.

In our previous blog, we speculated about whether the recent letters Alabama employers have been receiving from the Alabama Departement of Labor regarding alleged incorrect/invalid social security numbers was an attempt to enforce the Alabama Immigration Act. I decided to call the Alabama Department of Labor and inquire about the letter. Heres how it went:

I called Vivian Cooper who issued a letter to one of our clients. She was on the phone and the individual who answered the phone asked if someone else could help. I explained the subject of my call and she routed me to “Tony”. Here is what Tony said.

When asked how the names/numbers were compiled, he said that they were pulled from kickbacks from their software system, and not the result of any interaction with the Social Security Administartion or other federal agency.

Tony said that most of the discrepancies with social security numbers have been due to name changes.

When I mentioned to him that we were seeing a lot of foreign nationals and Latinos/Hispanics on the lists, he said that citizenship status had nothing to do with the lists. I then asked whether Hispanic double last names could be causing the issue, and he said that is very possible.

In terms of what to provide in response, he said either a copy of the social security card or the E-verify confirmation – there was no indication that both had to be provided. I mentioned that E-verify confirmation would only exist if the employer was an E-verify participate at the time of hire, but he did not seem to be very familiar with E-verify rules.

When I asked what would be done if the social security card or number turns out NOT to be legitimate, he said that they had not figured out what to do about that yet. He said that some employers have turned in tenative non-confirmations from E-verify and they are wondering what to do with them.

I then just asked him if this process has anything to do with the Alabama Immigration Act, and he said no. He said this was not about work authorization. Rather, it was just about cleaning up their records.

I asked him if they have been receiving a lot questions, and he said they have received some but most employers were just responding with what they have.

So, it remains to be seen what the Alabama Department of Labor will do with the information it receives from employers and whether there will be an follow-up in the event an employer provides a copy of a social security card that the Department determines to be invalid. Well stay tuned.

Some Alabama employers recently received an interesting letter from the Alabama Department of Labor that goes something like this:

An audit of your wage report for the quarter shows incorrect/invalid social security numbers were reported. Please review the attached printout and provide the correct social security numbers of each employee. Listed below are the acceptable documentations to be submitted:

Copy of valid social security card

Proof of validation through U.S. Citizenship and Immigration Services E-Verify website

Failure to respond WITHIN 30 DAYS may result in taxes and/or penalties.

A letter pointing out a discrepancy with a social security number is not that surprising, but the Alabama Department of Labors request for E-verify confirmations is a little bit of a shock and leads to some questions, such as:

Is the Alabama Department of Labor trying to enforce the Alabama Immigration Law by confirming that employers are using E-verify? (Im not sure the Alabama Department of Labor has the authority to ask for E-verify confirmations on the same basis as the federal government agencies such as ICE).

Is this letter about ensuring employees are work authorized?

What will be done with the information provided to the Alabama Department of Labor?

While the answers to these questions are unclear, employers who receive these letters should proceed cautiously in contacting the applicable employees and asking for documentation to confirm their social security numbers. There are implications both in terms of avoiding discrimination claims investigated by the Office of Special Counsel and in terms of avoiding worksite enforcement fines by ICE.

These letters suggest that the Alabama Department of Labor actually may be kickstarting enforcement of state law, HB56, that requires that employees be work authorized. Remember that HB56 Section 15 violations includes business license suspension for 10 days for the first offense. That could be painful.

Recently, we assisted a new client who had received a Notice of Intent to Fine from ICE following an I-9 inspection. It was a sad situation. This client had a slim profit margin and the amount of the fine was potentially devastating to the business. It’s rare that we have a client cry in an initial meeting regarding I-9s like this one did. (We certainly have had many who have wanted to cry or had reason to).

Fortunately, after we reviewed what the client had submitted to ICE through the inspection process, we were able to make some arguments and negotiate to reduce the fines by almost 50% and obtain a reasonable payment plan.

From this experience, here are some lessons this employer learned the hard way.

It is impossible to correct I-9 deficiencies after ICE comes knocking. Once ICE serves its Notice of Inspection, you only have three business days to respond. Besides not having time to make corrections in that short time period, ICE may not view such corrections as valid because they happened after the Notice of Inspection occurred. So, get your I-9s completed and corrected before you are audited.

Calling an attorney after you are issued a Notice of Intent to Fine is like calling a plumber after your house is flooded. The plumber may be able to fix the problem going forward, but most of the damage is already done.

Some fines can be avoided if you know the rules relating to technical and substantive violations, how to properly correct I-9s, the benefits of presenting copies of the documents associated with the I-9s, and the significance of no-match letters. If you are going to rely on the ICE auditor to teach you, just forget it, which brings me to the last lesson….

The ICE auditor is not your friend. She may say that education and compliance is the main goal, but you will be fined if a fine is possible. She may even say that you should not worry about being fined during the process, and then fine you anyway.

Our client still benefitted by obtaining counsel after receiving the Notice of Intent to Fine. We could have done so much more, though, had we been involved prior to and during ICE’s inspection.

The U.S. Citizenship and Immigration Services (USCIS) recently announced an ehnacment to the E-Verify program to combat identity fraud with respect to social security numbers. Basically, USCIS will lock social security numbers that appear to have been fraudulently used. If an employee provides a locked social security number while completing the I-9 form, E-Verify will generate a Tentative Nonconfirmation (TNC), which then will require the employee to contest the TNC at a local Social Security Administration field office.

Prior to this enhancement, USCIS believed it was more likely that a stolen social security number would not raise any red flags or result in a TNC, if the employee also provided the name and date of birth of the individual to whom the social security number belonged. Thus, for example, if I stole the name, date of birth, and social security number of John Smith, I may get through the E-Verify process with no problem, because there was no mechanism to catch that the social security number had been stolen.

Combating identify fraud is something everyone can support, but here are the bad news for E-Verify employers. Multiple TNCs may result in USCIS sharing such information with ICE, which in turn may result in an audit of the employers I-9s and other work authorization processes.

So, here is the key to the lock out. Employers must focus on I-9 compliance first and foremost. Specifically, employers should make an honest effort to examine whether the original documents presented by the employee appear to be genuine and belong to the employee. If the employee chooses to present a social security card as a List B document, pay close attention and make sure it appears to be genuine. (In conducting audits, I have seen many fake social security cards that even my 10 year old could have spotted.) If its reasonably clear that the documents presented are fake, the employee should not even get through the I-9 process, thus avoiding the social security number being run through E-Verify.

E-Verify employers who ignore or dont even try to identify fake documents and thereby rely on E-Verify as a safety net are making a mistake. It is no safety net, and the fact you used E-Verify and the employee does not receive a TNC will provide no immunity from liability if it turns out that the documents presented by the employee, including the social security card turn out as fake as monopoly money. Obtaining some basic training on spotting fake documents will go a long way for E-Verify employers, now more than ever.

Also, employers must remember that the employee has a choice of what documents to present. Requiring an employee to present specific document to avoid a TNC likely will be considered document abuse. As we have discussed in prior posts, the Office of Special Counsel receives statistical analysis from E-Verify regarding the types of documents presented by employees and initiates enforecement actions when they find patterns that suggest an employer is mandating a particular set of documents be presented for I-9 purposes.